FTSE might have resumed its drop towards 5575 over the next few trading sessions. The indice has reached 6100 levels over the last week as expected and hit the backside of the counter trend line as seen here. It should face resistance here and resume lower.
FTSE probable wave structure since 6500 highs on June 08, 2020 is as follows: The indice had dropped between 6513 through 5931 sub dividing into 5 waves, forming an impulse. The subsequent push was a corrective wave a-b-c flat, which terminated around 6333 mark.
Also note that the corrective wave had reached up to fibonacci 0.618 retracement of its earlier drop between 6513 and 5931 respectively. As expected, FTSE had reversed lower from there and has managed to print swing lows around 5863.
The recent pullback is also in line with expectations and reached 6100 mark. This is a resistance zone marked with back side of the past support trend line. High probability remains for a bearish turn from here and move towards 5575, going forward.
Furthermore, the recent boundary that is being worked upon is between 6333 and 5863 respectively. FTSE could reach up to 6150/6200 zone as well, before reversing lower again. Either way, it is just a matter of time for bears to take control from here.
Traders might be preparing to initiate fresh short positions around 6100/6200 levels going forward with a protective stop above 6500 and projected targets towards 5575 respectively. Only a break above 6500 would change the bearish structure.
Technical Analysis Team
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